The ability to borrow to acquire property within a SMSF using a Limited Recourse Borrowing Arrangement (“LRBA”) is experiencing exponential growth. This property acquisition strategy has been embraced not just simply by “Mum & Dad” SMSFs but is becoming increasingly popular with business “partners”. The prospect of acquiring property from which to operate a business, … Continue reading »
Is it essential when buying property using a limited recourse borrowing arrangement (LRBA) to require only two payments, being a deposit and settlement payment to comply with the single acquirable asset definition? This was the question recently asked of the NTLG Super Technical sub-group (December 2012) regarding example 10 within SMSFR 2012/1, which refers to … Continue reading »
The ability to utilise borrowings to repair and maintain an asset as part of an SMSF limited recourse borrowing arrangement (LRBA) has been a key feature of the revised legislation since 7 July 2010, when section 67A & 67B were introduced. However, being able to redraw on a loan facility to make such repairs is … Continue reading »
Whilst most of the attention with limited recourse borrowing arrangements (LRBAs) has centred around property transactions, there has been a need to clarify a range of issues on other acquirable assets, in particular assets allowable as a collection of identical assets under the definition of a single acquirable asset (SAA). It’s not uncommon when placing an … Continue reading »
The topic of borrowing in super continues to gain momentum with a growing number of SMSFs looking to establish limited recourse borrowing arrangements (LRBAs) to acquire property. The next SMSF Academy webinar will discuss the latest issues impacting LRBAs including: Understanding the Commissioner’s views in the final ruling, SMSFR 2012/1: application of key concepts … Continue reading »
Whilst the interest in limited recourse borrowing within self-managed super funds appears to be rising, the opposite has been posed to the Australian Taxation Office in respect to the level of interest than may be applied to a related party loan. The June 2012 NTLG minutes posed the question as to whether a zero percent … Continue reading »
It quite amazing how far we have come with limited recourse borrowing arrangements over the nearly 2 years since changes were introduced on 7 July 2010. Many people would recall at that time of the introduction of sections 67A and 67B into the SIS Act that many within the industry were highly critical of the … Continue reading »
If the industry was pleased about the draft ruling on limited recourse borrowing arrangements (LRBA), the final ruling, SMSFR 2012/1 has done nothing to wipe the smiles off trustee & industry faces. The ATO has taken a practical approach in this ruling to key concepts including: What is an ‘acquirable asset’ and a ‘single acquirable … Continue reading »
As we move closer to the implementation of industry reforms regarding the provision of financial advice, Treasury last week has added to the pile with the re-issuing of draft Corporations Amendment Regulations to provide that limited recourse borrowing arrangements as allowed under superannuation law are financial products. These reforms were previously announced back in March … Continue reading »
A Happy New Year to all my readers. The New Year provides us with time to think about and assess goals for the coming year. Whether we actually achieve them or not, well that’s a whole different matter… I have provide below 12 resolutions that you may with to consider in either setting up or … Continue reading »